Lingo Media Corporation
TSX VENTURE : LM
OTC Bulletin Board : LMDCF

Lingo Media Corporation

September 09, 2010 08:45 ET

Lingo Media Announces Closing of $1 Million Loan Financing

TORONTO, ONTARIO--(Marketwire - Sept. 9, 2010) - Lingo Media Corporation (TSX VENTURE:LM)(OTCBB:LMDCF) ("Lingo Media" or the "Company") a leader in online and print-based English Language Learning products is pleased to announce that it has closed a $1 Million bridge loan financing (the "Financing"). The Company may also raise up to an additional $1.5 Million on the same terms and conditions as the Financing. 

Pursuant to the terms of the Financing, Lingo Media has entered into a loan agreement and general security agreements with five arm's length parties and three insiders (collectively, the "Lenders") to borrow an aggregate of $1 Million (the "Loan"). The insider participation consisted of one director/officer who advanced $300,000 and two executive officers who advanced $55,000 in aggregate.

The Loan has a maturity date of September 8, 2011 (the "Maturity Date") and bears interest at a rate of 9% per annum, payable monthly in arrears, and is secured by a charge over all of Lingo Media's assets and properties. The Company will issue to the Lenders as additional consideration for the Loan an aggregate of 400,000 common shares of Lingo Media (the "Bonus Shares"). The Bonus Shares will be issued based on 20% of the value of the Loan, divided by a deemed issue price of $0.50 per Bonus Share. The Company has also agreed to repay to the Lenders $0.50 of every $1.00 raised by Lingo Media through any equity financing during the term of the Loan. Lingo Media may elect to prepay the Loan in whole or in part at any time at its sole discretion without penalty.

The Company has also agreed to issue 33,333 common shares of Lingo Media (the "Finder Shares") to eligible persons (collectively, the "Finder") in connection with the proceeds raised under the Loan through the Finder. All securities issued pursuant to the Financing, including the Bonus Shares and Finder Shares are subject to a four month statutory hold commencing from closing and are subject to the approval of the TSX Venture Exchange. 

The proceeds of the Loan will be used to fund: the post-closing and integration costs of the recently acquired ELL Technologies Limited; expansion of the ELL Technologies' sales team; the design, development and build out of Parlo Corporation's online English assessment product; and for general working capital and corporate purposes. It is expected that the Loan will be repaid from the Company's cash flow and any equity financing completed by the Company during the term of the Loan.

About Lingo Media (TSX VENTURE:LM)(OTCBB:LMDCF)

Lingo Media (www.lingomedia.com) is a diversified online and print-based education products and services company focused on English language learning ("ELL") on an international scale through its four distinct business units. ELL Technologies is a globally-established ELL multi-media and online training company marketed under the Q Group brand (www.qgroupplc.com). Parlo is a fee-based online ELL training and assessment service (www.parlo.com). Speak2Me is a free-to-consumer advertising-based online ELL service in China (www.speak2me.com/advertising). Lingo Learning is a print-based publisher of ELL programs in China. Lingo Media has formed successful relationships with key government and industry organizations, establishing a strong presence in China's education market of more than 300 million students. The Company continues to expand its ELL offerings in China and plans to extend its reach globally.

Portions of this press release may include "forward-looking statements" within the meaning of securities laws. Forward-looking statements contained in this press release are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve certain risks and uncertainties. Actual results may vary materially from management's expectations and projections and thus readers should not place undue reliance on forward-looking statements. Certain factors that can affect the Company's ability to achieve projected results are described in the Company's filings with the Canadian and United States securities regulators available on www.sedar.com or www.sec.gov/edgar.shtml.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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